NEURAL precursor cells are known to be greatly stimulated during their development by members of the fibroblast growth factor (FGF) family of growth factors. FGF activity is regulated by essential interactions with a low affinity class of receptors called heparan sulphate proteo-glycans (HSPGs), which modulate subsequent binding to the high affinity signal transducing receptors. We have purified a novel species of secreted HSPG and generated specific polyclonal antibodies against its core protein. The HSPG exactly co-localizes with FGF-2 within the neuro-epithelium of the embryonic mouse. The results support the concept that HSPGs play crucial roles in regulating neural cell responses to particular growth factors.